More Ford Production Heads South of the Border, Down Mexico Way
In an announcement that’s been anticipated for months, Ford Motor Company said today it will build a small car plant in Mexico’s San Luis Potosi state.
Ford will spend $1.6 billion on the facility, which starts construction this summer and will employ 2,800 workers by 2020.
The automaker isn’t saying what vehicles it will produce at the plant, but it’s widely expected that the Focus will move to Mexico after production stops at its Wayne, Michigan facility in 2018. Offshoots of the platform, including a rumored hybrid, could also be produced.
Late last year, the UAW ratified new agreements for workers employed by the Big Three automakers. Though entry-level workers saw wage hikes, the contract allowed the automakers to increase vehicle production in other countries, especially that of lower-end models like compact cars.
Workers at Mexico manufacturing plants make less than one-quarter the wages of U.S. auto workers, increasing an automaker’s profits on the end product. Ford already manufactures engines, heavy trucks, and its Fiesta subcompact in Mexico.
In its official release, Ford said it was “boosting small car profitability” and “increasing competitiveness” by investing in the plant.
The freed-up capacity at Ford’s Wayne assembly plant is expected to be used for the next Ranger pickup and Bronco SUV.